Attorney General Tim Fox settles lawsuit against Gallik

Attorney General Tim Fox's office and former Commissioner of Political Practices Dave Gallik on Tuesday agreed to walk away from a more than two-year-old lawsuit alleging Gallik abused his state office.

Assistant Attorney General Mike Black said at a hearing before Cascade County District Court Judge Greg Pinski that it was not in the taxpayers' interest to bring the false claims act lawsuit against Gallik before a jury.

"We are conserving resources for the state and the court where the case is essentially a wash," Black said. "I don't think it is sound policy or sound judgment to take this to a jury trial over a couple hundred dollars."

Black told Pinksi an investigation into allegations against Gallik found evidence that Gallik inappropriately conducted his private law practice work out of his state office, but that an accounting error resulted in Gallik getting underpaid for sick leave and vacation time.

Former Gov. Brian Schweitzer, a Democrat, in May 2011 appointed Gallik, a former Democratic state lawmaker, to be the state's top ethics and political cop.

Gallik resigned as commissioner in January 2012, shortly after the Great Falls Tribune reported allegations made by four staff members in the office who claimed Gallik, an attorney, was conducting private law practice work out of his state office.

The Bozeman-based conservative watchdog group the Montana Policy Institute brought a lawsuit under the state's false claims act March 2012 after the articles first ran in the Tribune. Republican Majority Leader Art Wittich of Bozeman represented MPI in the case.

The False Claims Act, which Gallik carried when he was in the state House in 2005, is a law authorizing a private person to prosecute a recovery and civil sanction action on behalf of the state government against any person who obtains payment from a government entity by means of a knowingly false or fraudulent representation or claim. The Montana Attorney General can then decide whether to join in on the lawsuit, stay out of the lawsuit or move to dismiss the lawsuit altogether.

Democratic Gov. Steve Bullock, when he was still serving at attorney general, appointed Great Falls attorney Ward "Mick" Taleff to represent state in the case in 2012. Taleff sought to dismiss the case, arguing in court that the Montana Policy Institute lacked standing to bring the lawsuit.

In April 2013, Missoula District Judge John Larson rejected the state's claim and ruled the lawsuit against Gallik could proceed. A month later, newly Republican Attorney Tim Fox announced that his office would take over the case and his office began its own investigation into the allegations against Gallik. The state filed an amended complaint in September 2013.

Gallik then filed a counterclaim for breach of contract, alleging the state failed to pay him his total salary for the time he worked for the state.

The two sides met with a mediator in July, and according to court records the mediation was "fruitful," but the parties couldn't come to an agreement, partly because the Montana Policy Institute said it would object to any settlement that didn't require Gallik to admit wrongdoing.

In asking the court to approve the settlement, Black said the risk to the state from Gallik's counterclaim and the amount of state resources necessary to bring the case to a jury trial didn't justify continued pursuit of the false claims action against Gallik.

MPI opposed the settlement. Wittich said approval of the settlement agreement sends a message to individuals who might alert the public to wrongdoing by public officials

"When (the commissioner's staff) stuck their head out, they were taking a risk in letting people know what Mr. Gallik was doing," Wittich said. "What we're communicating is they should have kept their head down, should have ignored what they were seeing."

Pinski agreed with the state to approve the settlement over Wittich's objections.

"MPI commenced this action to recover funds for taxpayers," Pinksi said. "Regardless of whether one views MPI's motives as altruistic or partisan, this case likely cost the taxpayers more than it could recover (through a jury trial)."

Pinksi also denied MPI's request to recover $45,500 in attorney fees and $900 in costs.

In an interview after the hearing Wittich said Tuesday was "a bad day for taxpayers."

"This ruling sends a terrible message to the 11,000 conscientious state employees across the state," Wittich said. "We had whistle blowers who saw improper activity, somebody getting state compensation for not doing any state work, they blew the whistle but there won't be any consequence."

Wittich was recently in court over claims from the state that he violated campaign laws by coordinating with and taking illegal corporate contributions from Western Tradition Partnership, a conservative group.

According to the Associated Press, on Aug. 26, Helena District Court Judge Jeffrey Sherlock dismissed Wittich's claims that the governor, a state senator and two commissioners of political practices conspired to drive him out of office.